Rightmove House Price Index The largest monthly sample of residential property prices November 2018 National edition
Under embargo for 00.01 hours, Monday 19 th November 2018 Early Christmas gift for buyers as sellers lower their price expectations The price of property coming to market falls by 1.7% (- 5,222) this month, and whilst it is the norm for new seller asking prices to fall at this time of year, this is the largest November drop since 2012 New sellers pricing more realistically in effort to minimise pre-christmas buyer humbug syndrome fuelled by stretched affordability and Brexit uncertainty All regions see a monthly price fall, with largest falls in the south and the upper price sector: Higher end London commuter towns - where prices have risen by over 40% since 2011 - unsurprisingly have significant price falls Annual national rate is marginally negative (-0.2%, - 607) for the first time in seven years Price slowdown seen as an early Christmas present for some buyers with numbers of sales agreed up nationally by 1% compared to same period a year ago, indicating some sound underlying fundamentals National average asking prices Month Avg. asking price Monthly change Annual change Index Nov 2018 302,023-1.7% -0.2% 233.5 Oct 2018 307,245 +1.0% +0.9% 237.5 National average asking prices by market sector (excluding Inner London) Sector Nov 2018 Oct 2018 Monthly change Annual change First-time buyers 188,571 190,587-1.1% +0.3% Second-steppers 272,017 274,789-1.0% +1.5% Top of the ladder 531,775 545,020-2.4% -0.3% Monthly asking price trend 320,000 315,000 310,000 305,000 300,000 295,000 290,000 285,000 280,000 Rightmove measured 123,536 asking prices nationally this month, circa 90% of the UK market. The properties were put on sale by estate agents from 7 th October 2018 to 10 th November 2018 and advertised on Rightmove.co.uk. 2
Overview The price of property coming to market falls by an average of 1.7% (- 5,222) this month. It is the norm for new seller asking prices to fall at this time of year to attract buyers who are increasingly distracted by the run-up to Christmas. However, this is the largest drop in the month of November since 2012. The backdrop of cooling markets in the south and in the upper price sectors, combined with the political uncertainty, has resulted in new sellers lowering their asking price aspirations earlier than usual. Encouragingly, slightly more sales have been agreed than in the same period a year ago. Miles Shipside, Rightmove director and housing market analyst comments: New sellers and their agents are reacting to market forces and lowering their pricing aspirations by more and sooner than usual. Stretched buyer affordability and the cooling markets in the south and in upper price brackets have combined with the ongoing political uncertainty to change pricing optimism into pricing realism. This is a welcome effort by sellers to minimise the usual pre- Christmas market slowdown. Some new-to-the-market sellers and their agents have acted early to try to improve the buying mood and avoid the traditional buyer humbug dislike of Christmas housing activity. All regions see a monthly fall in the price of property coming to market, with most of the largest falls in the south. After Yorkshire and the Humber, the second largest monthly faller is the South East with an average 2.1% fall (- 8,647). Some of the more expensive towns in the London commuter belt which had seen over 40% price rises since 2011 unsurprisingly have significant price falls. London new seller asking prices drop too by 1.7% (- 10,793), though this is not unexpected since the capital generally sees greater seasonal price volatility than the rest of the country. Shipside observes: Seven years ago price rises started rippling out from the capital into the commuter belt in the South East. That ripple effect has now been reversed, with some of the London market price re-adjustment reverberating out into the commuter belt. New sellers of property now coming to market in this region have belatedly lowered their price sights. Higher end former hot-spot towns are now among the biggest annual fallers with Rickmansworth (- 7.1%), Esher (-6.4%) and Gerrards Cross (-6.0%) now cold spots following price rises of nearly 40% over the seven preceding years. These factors have contributed to the first national year-on-year price fall since November 2011, with the price of newly-marketed property now 0.2% (- 607) cheaper than 12 months ago. With the supply of new-build houses remaining tight, a low interest rate environment combined with near record employment, and average wage increases now rising faster than both CPI inflation and average property prices, the underlying fundamentals for a stable property market remain sound. Indeed the number of sales agreed by estate agents was up in October 2018 compared to October 2017, albeit by a modest 1%. Shipside notes: While many thought that the down-to-the-wire Brexit deal uncertainty would hold people back from buying, more buyers have actually jumped in. Some buyers see this pre- Christmas price lull as a gift to their negotiations. It proves that people need to get on with their lives and will continue to buy homes if the underlying economic fundamentals remain strong. New sellers and their agents are reacting to market forces and lowering their pricing aspirations by more and sooner than usual. Stretched buyer affordability and the cooling markets in the south and in upper price brackets have combined with the ongoing political uncertainty to change pricing optimism into pricing realism. Miles Shipside, Rightmove director and housing market analyst 3
Agent s view Richard Freshwater, Director of Cheffins Estate Agents in Cambridge, said: There has been an increase in the number of price reductions this year, but this is partly due to the UK being in the final throes of Brexit negotiations and the uncertainty which this has brought to the market. This has been compacted in the later months of the year in the run up to Christmas as part of the usual annual slow down during the winter months. Motivated sellers need to ensure that their properties have been priced realistically from the outset as increases in stock continue to allow buyers to drive market fluctuations. Those which have been realistically priced and correctly marketed from the off are still seeing large viewing numbers, offers and in some situations, sealed bids. The key with price reductions is to drop the price by enough to bring in a new set of buyers within a new bracket. The mistake often made by sellers is to reduce the price on consecutive occasions which can have a damaging effect and put buyers off. It is much more sensible to significantly reduce to a rounded figure and then bring in higher levels of interest, hopefully to generate competition between buyers. 4
Asking price trends Five year asking price trend 320,000 310,000 300,000 290,000 280,000 270,000 260,000 250,000 240,000 230,000 220,000 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 % monthly change in average asking prices 2.0% 1.5% 1.0% 0.5% 0.7% 0.8% 1.5% 0.4% 0.8% 0.4% 0.7% 1.0% 0.0% -0.5% -1.0% -1.5% -0.6% -0.1% -2.0% -1.7% -2.5% -3.0% -2.3% -2.3% Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 5
Average time to sell and stock Average 'time to sell' (no. of days) - National 80 75 72 70 65 60 59 62 67 65 61 59 56 56 57 60 61 61 55 50 45 40 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Average stock per agent (including Under Offer/Sold STC) 60 50 40 48 47 43 42 43 45 47 50 52 53 52 52 52 30 20 10 0 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 6
Regional trends 7
London trends Transport for London zones Avg. price Nov 2018 Avg. price Oct 2018 Monthly change Avg. price Nov 2017 Annual change Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 1,302,512 1,348,421-3.4% 1,399,684-6.9% 734,629 748,012-1.8% 758,647-3.2% 581,978 594,675-2.1% 592,026-1.7% 483,930 484,840-0.2% 486,171-0.5% 469,775 475,754-1.3% 475,813-1.3% 493,822 498,865-1.0% 479,159 3.1% Average 'time to sell' (no. of days) - London 90 85 80 75 70 65 60 55 50 45 40 83 78 75 71 72 70 72 72 71 67 67 67 67 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 8
London trends Borough data is based on a three month rolling average and can be used as an indicator of overall price trends in each borough over time. It is not directly comparable with the overall London monthly figures. Borough Avg. price Nov 2018 Monthly change Annual change Hammersmith and Fulham 971,975 3.2% 2.8% Bexley 408,913-0.3% 2.8% Bromley 536,921 0.2% 2.1% Southwark 658,767 1.4% 1.8% Hillingdon 493,666 1.1% 1.5% Barking and Dagenham 314,816-0.3% 1.5% Havering 406,169 0.2% 1.3% Greenwich 437,947-0.1% 1.0% Ealing 557,026 0.5% 0.8% Kingston upon Thames 612,899-0.4% 0.4% Enfield 458,460-0.1% 0.3% Haringey 603,691 0.0% 0.2% Redbridge 460,909 0.3% 0.1% Sutton 463,721 0.1% 0.1% Westminster 1,445,625-1.2% 0.0% Richmond upon Thames 841,418-1.6% 0.0% Waltham Forest 479,089-0.9% -0.1% Newham 415,626 0.4% -0.2% Barnet 638,449 0.5% -0.2% Brent 581,778 1.1% -0.4% Camden 985,430 0.4% -0.6% Islington 751,991-0.3% -1.4% Harrow 555,569 0.0% -1.6% Kensington and Chelsea 1,622,610 1.5% -2.2% Croydon 432,595-0.5% -2.2% Lewisham 459,062 0.5% -2.5% Hounslow 531,607-0.2% -2.6% Wandsworth 785,602-1.0% -2.9% Merton 624,062-1.5% -3.8% Tower Hamlets 577,341 0.9% -3.9% Hackney 625,135-0.9% -4.9% Lambeth 624,633-1.8% -6.8% 9
Editor s notes About the Index: The Rightmove House Price Index methodology was updated in January 2018. The report now includes data for Scotland and a number of measures have been refined. The stock per agent figure now calculates the average based on the number of properties an agent has on Rightmove each day across the month, rather than the average of the total number of properties each agent advertised in the month. London asking prices are now broken down into travel zones. For the purpose of historical comparisons, the historical figures have been restated based on the new methodology. The Index includes asking price breakdowns in the housing market to offer trends at three different sectors of the market: first-time buyer, second-stepper and top of the ladder. Inner London prices have been excluded from this categorisation as the normal housing ladder is not really applicable. Advertising property for over 90% of all UK estate agents, Rightmove is in a unique position to identify any immediate changes in the market. Rightmove s House Price Index is compiled from the asking prices of properties coming onto the market via over 13,000 estate agency branches listing on Rightmove.co.uk. Rather than being a survey of opinions as with some other indices, it is produced from factual data of actual asking prices of properties currently on the market. The sample includes up to 200,000 homes each month representing circa 90% of the market, the largest and most up-to-date monthly sample of any house price indicator in the UK. The Index differs from other house price indicators in that it reflects asking prices when properties first come onto the market, rather than those recorded by lenders during the mortgage application process or final sales prices reported to the Land Registry. In essence, Rightmove s Index measures prices at the very beginning of the home buying and selling process while other indices measure prices at points later in the process. Having a large sample size and being very up-to-date, the Rightmove Index has established itself as a reliable indicator of current and future trends in the housing market. Rightmove measured 123,536 asking prices nationally this month, circa 90% of the UK market. The properties were put on sale by estate agents from 7 th October 2018 to 10 th November 2018 and advertised on Rightmove.co.uk. Market sectors explained: First-time buyer: This figure represents the typical property a first-time buyer would purchase, covering all two bed properties and smaller that come to market (houses and flats). Second-stepper: This figure represents the typical property of a person moving from their first home, covering all three and four bed properties that come to market (houses and flats) excluding four bed detached houses. Top of the ladder: This figure represents asking prices at the top end of the market, covering all five bed properties and above (houses and flats), as well as four bed detached houses. About Rightmove.co.uk: Rightmove.co.uk is the UK s leading property website, displaying details of homes for sale or rent to the largest online audience. It is consistently ranked the number one property website in the UK (source: Experian Hitwise). It has circa 90% of all properties for sale and at any time displays a stock of over one million properties to buy or rent. The Rightmove.co.uk site attracts over 130 million visits from home movers each month with time on site averaging over one billion minutes per month (Rightmove data, July 2017). 10